File Chapter 7 bankruptcy and skip the means test!

There is a simple way to avoid filling out the means test when you are filing a Chapter 7 bankruptcy case.

If a debtor has primarily business debts, there is no need to complete the means test!

Or, to put it in more precise bankruptcy language, if a debtor has “primarily non-consumer debts,” just check the box on the front of form B22A and move on.

The most common form of non-consumer debt is that incurred in business. But don’t forget to include taxes, judgments on collections lawsuits (like auto accidents and drink driving cases, for example), and debts involving investments in general, and investment properties in particular.

Debtors who can get these categories to equal or exceed 51% of their total declared debt are then home free, at least as far as the means test is concerned.

For those who have run a business by the seat of their pants (financing it with personal credit cards), it may be necessary to sort the cards into piles of “business” versus “personal” credit lines. And if you have mixed business and pleasure on a single card, you might have to go through statement by statement highlighting the business purchases. But in the right case, it could be worth it if it gets you qualified for a chapter 7 bankruptcy.